Hooking up the red and black wires and disregarding the white wire will provide the necessary power to light the lights, which will be permanently on, and power the trains. However, you will need to plug the three wire jack into the Lionel controller in order to turn the trains on and off. I don't use the AIU, but a separate 30 watt transformer to provide the 14 volts required by the Hobby Shop. It has an on/off switch that I use to turn the lights off.
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